Residential construction costs continue to rise.

Statistics Canada’s latest look at the building construction cost index for the second quarter of the year finds that residential building construction costs grew by 1.9% compared with 1.8% in the previous quarter. Meanwhile, non-residential building construction costs cooled slightly, rising 1.5% in the second quarter after an increase of 1.7% in the first quarter.

Year over year, construction costs for residential buildings in Statistics Canada’s 11-census metropolitan area (CMA) composite rose 7.5% in the second quarter, whereas non-residential building construction costs rose 7.0%. Toronto (+13.0%) led year-over-year growth in construction costs for residential buildings, while Moncton (+12.5%) led growth for non-residential building.

Skilled labour shortages, cost of materials and labour rate changes were reported by contractors as key factors impacting the construction sector.

While a majority of CMAs recorded quarterly growth in residential building construction costs in the second quarter, four reported decreases. Costs to construct residential buildings increased the most in Toronto (+3.8%) and Halifax (+2.9%); Edmonton (-1.2%) and Saskatoon (-0.3%) recorded the largest declines.

The diverging price movements of key construction materials impacted residential construction costs. In the second quarter, prices continued to rise for cement and ferrous metals, while they declined for lumber, plastics and non-ferrous metals.

In the 11-CMA composite, the cost to build high-rise apartments (+2.8%) grew the most of all residential buildings in scope for the survey, followed by single-detached homes (+1.8%).

Non-residential building construction costs grew the most for structural steel framing (+2.6%) in the second quarter, followed by concrete (+2.5%) and metal fabrications (+2.4%) divisions. The continued increase in concrete prices drove the rise in costs, as concrete is a major component in non-residential construction.

Of all non-residential buildings surveyed, the cost to build factories and warehouses (both up 1.8%) rose the most in the 11-CMA composite.

Costs to construct non-residential buildings increased the most in Moncton (+3.9%), Vancouver (+2.7%) and Ottawa (+2.5%).